S. Korea aims to buy two foreign oil companies by year's end

SEOUL, Sept. 22 (Yonhap) -- South Korea wants to buy at least two foreign oil
companies by year's end to significantly raise the country's crude reserves, a
senior government official said Tuesday.
Vice Knowledge Economy Minister Kim Young-hak told reporters that "exclusive"
negotiations are underway with five companies and that mergers and acquisition
deals with two may be reached this year.
The official, who declined to go into specifics, said depending on what companies
are bought, the total volume of oil that can be produced from fields controlled
by South Korean companies could shoot up from 1.1 billion barrels at present to
close to 6.5 billion barrels.
"South Korea can generate roughly US$9 billion worth of funds through various
financing arrangements that can facilitate any merger deal," Kim said.
He said the increase does not include the Bazian oil field and several others in
northern Iraq in which South Korea already has stakes. Those fields could yield
up to three billion barrels.
The state-run Korea National Oil Corp. said earlier in the month that drilling in
the Iraqi fields should begin in October with results likely to be out by late
December.
South Korea relies almost exclusively on foreign imports for its oil. It has
steadily bought up foreign oil fields or acquired stakes to push up the country's
self-sufficiency level in the resource to 6.3 percent as of June from 4.2 percent
in 2007.
yonngong@yna.co.kr
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